Schemes fail on funding rules - Four out of 10 defined benefit pension schemes failed to meet their statutory funding requirements in 2004, according to the Pensions Board's annual report. The Irish Times says that out of the 596 occupational schemes that submitted actuarial funding certificates to the board, 240 did not meet the minimum funding standard, which is designed to protect members in the event schemes are wound up. The 240 schemes have made funding proposals to the board. In order to satisfy the minimum funding rules, employers must either increase their contributions, ask employees to increase their rate of contribution, reduce the promised benefits or a combination of these options. Recent figures from the Pensions Board relating to the first five months of 2005 show that a further 126 schemes or 51% of the schemes who have submitted funding certificates this year are also failing to meet the minimum standard. Since September 2003, pension schemes can apply to the Pensions Board for an extension of up to 10 years in which they can get their funding back on track. By the end of May 2005, the board had granted over 140 applications for an extension. Defined benefit pension schemes are the most valuable type of pension for workers, as they guarantee that members will receive a pension based on a percentage of their salary for each year of service. The biggest risk for employees is that the schemes will become insolvent.
Tax burden on low-paid is 'lowest here' - Ireland levies the lowest tax burden on low-paid workers among the Organisation for Economic Co-operation and Development (OECD) countries, a new report from the organisation revealed yesterday. The Irish Independent says that the report on the euro area economies states that the labour market structure in the zone needs to be overhauled if more jobs are to be created. However, Ireland comes out on top in key areas such as the tax burden and social security contributions, which in some countries have acted as a disincentive for employers to hire more workers. The report also backs the stance of the European Central Bank on interest rates as the bank bids to fend off political pressure for lower eurozone interest rates. The OECD's statement that it would be reasonable to leave rates at 2% coincided with statements by ECB Governing Council members that high oil prices posed inflation risks and interest rates were at appropriate levels.
Ireland's Eurofood in middle of Parmalat row - The Irish Examiner says that Italy's Parmalat and Bank of America wrestled over control of an Irish Parmalat subsidiary, Eurofood, at the European Court of Justice yesterday, in a case that could affect the secrecy of off-shore vehicles. Parmalat collapsed in 2003, driven into insolvency by murky off-shore financing, and is now seeking $10 billion damages for alleged fraud from Bank of America, Citigroup, and former auditors Deloitte and Grant Thornton. A key battleground has been Parmalat's Irish financing unit, Eurofood, which Parmalat says is central to the fraud paper trail but which Bank of America, a Eurofood creditor, and Irish liquidators have fought to keep in Ireland, while opposing Italian jurisdiction over the unit's bankruptcy. 'It's central to our case against Bank of America,' said a Parmalat spokesman. 'Eurofood was deeply involved in the fraud at Parmalat and, as such, all the documentation is of interest in terms of getting to the bottom of the scandal,' he said.
Telefónica chief Alierta charged - César Alierta, executive chairman of Telefónica, the Spanish telecommunications group, has been charged with insider trading in connection with alleged improper share trades when he was chairman of a tobacco company, reports the Financial Times. The public prosecutor's office is seeking a four-and-a-half-year jail sentence for Mr Alierta, the most senior executive ever charged with insider trading in Spain. The prosecutor's office is also requesting the seizure of €1.86m of profits Mr Alierta is alleged to have made from trading in Tabacalera shares when he was chairman of the Spanish tobacco group in 1997. If found guilty, the prosecutor is also demanding that Mr Alierta be banned from holding directorships in public companies for four years. Mr Alierta, a wealthy former stockbroker, stepped down from Tabacalera to become chairman of Telefónica in 2000.